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Kohler moving work from Wisconsin to Mississippi

Posted: 11:26 AM, Mar 13, 2019
Updated: 2019-03-13 12:26:40-04
Kohler Engines headquarters in Wisconsin

HATTIESBURG, Miss. (AP) — A maker of small engines is consolidating operations from Wisconsin to Mississippi, with plans to hire 250 people there over the next two years.

Local economic developers said Tuesday that Kohler Co. will invest more than $15 million in a new Hattiesburg facility, moving the work from its headquarters in Kohler.

Kohler will lease 300,000 square feet in an industrial park to assemble gasoline-powered engines. A 20-year-old Kohler lawnmower engine plant in Hattiesburg employs 350.

"This consolidation to our plant in Hattiesburg will help us serve our customers better by giving them a single source for all of our twin-cylinder gasoline engines," said Brian Melka, president of Kohler Engines, in a statement. "Our business continues to grow, and this development makes our operation even stronger and more capable of delighting our customers in the future."

In a statement later Tuesday, privately held Kohler Co. said it had reached an agreement with UAW Local 833 to "make available alternative jobs in Wisconsin for every one of the affected associates."

The Hattiesburg expansion is supposed to be complete in a year, with all 250 workers hired within two years.

Mississippi Development Authority spokeswoman Tammy Craft said state and local governments could offer Kohler more than $18.5 million in tax breaks and subsidies. That includes a $2.6 million grant to relocate equipment, $300,000 for workforce training, $100,000 from the city-county industrial park authority. Craft said local officials are also likely to grant tax breaks on inventory, property and new equipment worth an estimated $11.1 million over 10 years.

"Our business continues to grow, and this development makes our operation even stronger and more capable of delighting our customers in the future." — Brian Melka, president of Kohler Engines

New Mississippi workers are projected to make $45,000 a year, on average. That's high enough to qualify the company for a state program that will rebate a portion of worker income taxes, worth a potential $4.5 million over 10 years.

At the same time the deal was announced, Forrest County and Hattiesburg officials agreed to settle a lawsuit by Kohler alleging the company had been forced to pay too much in property taxes. Forrest County attorney David Miller said the city and county agreed to settle the lawsuit, refunding about $1.25 million to Kohler in coming years as an additional tax credit on top of the incentives negotiated in the new deal.